BEIJING, Dec. 8 (UPI) -- China's inflation rate fell sharply to 4.2 percent in November from October's 5.5 percent, the bureau of statistics said Friday.
The decline in the November consumer price index, China's main gauge of inflation, was credited largely to falling food prices and was a significant improvement from the 6.5 percent year-on-year rate in July, a three-year high. The National Bureau of Statistics said the November number was a 13-month low.
The November improvement was expected to allow for further easing of monetary policies in the world's second-largest economy. The tight monetary policies had been put in place to cool the economy and to rein in high inflation, but growth concerns lately have highlighted the need to loosen them.
The Eurozone debt crisis and problems in other markets also have reduced demand for Chinese goods.
China has already lowered the amount of money banks must keep in reserve to allow them to lend more.
In the first 11 months of 2011, inflation rose 5.5 percent year-on-year, still far higher than the government's target of 4 percent for the whole year, the bureau said.
China's government think tank this week lowered its forecast for 2011 economic growth to 9.2 percent from a previous forecast of 9.4 percent. The Chinese Academy of Social Sciences said the revision reflected various factors, including a volatile world economic recovery and the country's tight monetary policy.
The academy said it expects GDP growth to reach 8.9 next year assuming "there is no significant deterioration in the global economic and political conditions and no serious natural disasters nor other problems at home." Inflation for 2012 was projected to be 4.6 percent.
